New Zealand Dollar Tumbles To 3-week Low Against Euro
The New Zealand dollar extended its early European session’s downtrend against most major currencies in early New York trading on Wednesday.
The kiwi plummeted to near a 5-week low of 61.85 against the Japanese yen by 8:45 am ET, down around 1.5 percent from Tuesday’s close of 62.78. The next downside target for the kiwi-yen pair is seen near the 61.5 level.
The monetary base in Japan was up 6.1 percent on year in August, the Bank of Japan said today, coming in at 93.3 trillion yen. The monetary base also had risen an annual 6.1 percent in July. Seasonally adjusted, the monetary base climbed 3.6 percent to 94.19 trillion yen - up from 93.91 trillion yen in July, which saw a 6.9 percent contraction.
The New Zealand dollar slumped to a 3-week low of 2.1227 against the euro and a 2-week low of 0.67 against the US dollar by 8:45 am ET. The kiwi that closed yesterday’s deals at 2.1079 against the euro and 0.6755 against the greenback is currently quoted at 2.1192 and 0.6711, respectively. If the kiwi drops further, support levels are seen around 2.146 against the euro and 0.665 against the greenback.
The euro declined after the Eurostat report revealed the Euro-zone economy contracted 0.1% sequentially in the second quarter, following a 2.5% fall in the first quarter. Compared to previous year, seasonally adjusted GDP dropped 4.7% in the second quarter, revised from 4.6% estimated initially.
Another report said that Euro-zone industrial producer price index or PPI dropped 8.5% year-over-year in July, compared with a 6.5% fall in the previous month. On a monthly basis, producer prices decreased 0.8% in July, after rising 0.4% in June, revised from 0.3% growth estimated initially. Economists were looking for a decline of 0.6%.
In the U.S., private sector employment fell by 298,000 jobs in August following a revised decrease of 360,000 jobs in July. Economists had expected a decrease of about 246,000 jobs compared to the loss of 371,000 jobs originally reported for the previous month.
The US Labor Department released its revised report on labor productivity in the second quarter, showing that productivity increased by 6.6 percent in the second quarter compared to the 6.4 percent increase that was reported last month. Economists had been expecting productivity growth to be unchanged at 6.4 percent.
Additionally, the Labor Department said that unit labor costs decreased by a revised 5.9 percent in the second quarter compared to the previously reported 5.8 percent drop.
The New Zealand currency that closed Tuesday’s trading at 1.2246 against the Australian dollar has lost more than 1.4 percent to reach a 19-day low of 1.2407 by 9:15 am ET. The aussie-kiwi pair is presently worth 1.2394 with 1.244 seen as the next target level.
Looking ahead, the US Commerce Department is due to release its report on factory goods orders for July at 10:00 am ET. Orders for manufactured goods are likely to have increased 1.5% in the month.
The Federal Reserve is scheduled to release the minutes of its August 11th-12th meeting at 2 pm ET.
